According to the Orkneyinga saga, towards the end of his reign, Sigurd challenged a native ruler, Máel Brigte the Bucktoothed, to a 40-man-a-side battle. Treacherously, Sigurd brought 80 men to the fight. Máel Brigte was defeated and beheaded. Sigurd strapped the head to his saddle as a trophy, but as Sigurd rode, Máel Brigte's buck-tooth scratched his leg. The leg became inflamed and infected, and as a result Sigurd died. He was buried in a tumulus known as Sigurd's Howe, or Sigurðar-haugr, from the Old Norse word haugr meaning mound or barrow. The location of Sigurd's Howe is most probably modern-day Sidera or Cyderhall near Dornoch.

Sigurd's death was apparently followed by a period of instability. He was succeeded by his son Guttorm, who died within a few months. Rognvald made his son Hallad Earl of Orkney, but Hallad could not contain the pirate Vikings, resigned his earldom and returned to Norway in disgrace. The sagas say that Rognvald's other sons were more interested in conquering places other than Scotland, and so the earldom was given to Rognvald's youngest son, Einarr.